Volex Share Discussion Threads

[pugugly] 26/6/2024 12:19

disco - Thanks -

[mfhmfh] 26/6/2024 11:49

I saw it on here, last paragraph:

[disc0dave46] 26/6/2024 11:41

They've just reiterated previous target and rating.

[pugugly] 26/6/2024 11:19

mfhmdh: Thanks Do you or anyone else know what was their previous taqrget?
No notes on Research Tree today.

[mfhmfh] 26/6/2024 11:13

Peel Hunt - 400p target price.

[disc0dave46] 26/6/2024 10:11

Looks like a slight beat to me, the caveat being how much of Murat Ticaret (MT) was factored into the forecasts.If you exclude MT's Rev contribution then group Rev growth was only 8%, which on comparatives was half previous years growth rate.Would have been nice to see the operating and pbt numbers just for MT.Debt may be putting folks off too, but IMO the BS doesn't look too stretched, despite finance charges increasing 77%.Pension deficit attributable to MT is also a slight negative at $4.5m.May wait until investor presentation to see what forecast numbers are now.

[ijamlon] 26/6/2024 09:54

Well said, the very strategy that has led them to multiply revenues, profits and share price over last ten years, ie investment, acquisition, adapting to new growth markets, is one that the average short-term, jam-today UK investor can't be bothered with. Their loss

[pireric] 26/6/2024 09:43

They're basically saying that there's going to be towards $50m of capex (up >50% y/y) and another $8m of opex going through the P&L (best part of 1% of margin investment).

The problem is not that they are investing. It's that you are going to see reduced broker FCF forecasts for FY25, as no-one as far as I would imagine was pencilling in that degree of capex. Blame the company CFO for not pre-spelling this out for the brokers ahead of time. As it's hard to think the stock should go up on a downward FCF revision

I can't work out whether P&L forecasts will go down on the back of investments as don't have a proper forecast stack and I doubt brokers are splitting out that investment line in their forecasts.

In other words, this reads like a small FCF ('cash profit') warning for FY25 so not sure why you're surprised the stock is down.

Eric

"In response to increasing customer demand, the Group invested in the further expansion of its global manufacturing base, creating additional capacity to facilitate growth as part of the Group's five-year growth plans. Total gross capital investment increased to $31.6 million (FY2023: $27.0 million), representing 3.5% of revenue (FY2023: 3.7% of revenue). The prior year expenditure included $8.7m of assets which were purchased under lease agreements. As well as expanding capacity to support future growth, investment was concentrated on high-growth areas, including EV and data centre capabilities. The investment strategy continues to be shaped by customer demand, localisation requirements and capability enhancements.

In FY2024, we made $8 million of operational investments to support growth. These investments include additional operating costs to enhance our operational capacity, expand our market presence, and drive innovation. This also encompasses increased depreciation expenses from additional capital investments and costs associated with scaling our organisation and manufacturing footprint, such as recruiting additional sales and engineering staff. These targeted expenditures are essential for scaling up our operations and positioning us for long-term success."

[blusteradjuster] 26/6/2024 09:19

This being London, the fact that a growth company is investing-for-growth (capex) rather than showering the dividends, is seen as a negative.

That and the itinerant trader gang bailing of course.

[tulley1] 26/6/2024 09:06

Wait for the investor presentation. I'm sure this will tick back up

[1goldfish] 26/6/2024 09:01

Nothing in these results or forward guidance should make anyone sell, it's a solid company, diversified, great prospects. Buy, add and hold.

[ijamlon] 26/6/2024 08:58

Perfectly solid results, though the dilution from new share issuance and the cost of financing debt means top line growth hasn't connected to the bottom line as well as before. It always trades weirdly on results day. Bet my bottom dollar the share price will be higher in a few weeks than it is today, maybe even after the results presentation.

[igoe104] 26/6/2024 08:49

Interesting to see they are opening a off highway business in North America. Also looks like the destocking issues in electric Vehicles is coming to a end...

[ayl30] 26/6/2024 08:43

I jumped in at 325p

[igoe104] 26/6/2024 08:38

Don't these always go down on results day ? Traders jumping in and out..

[johndoe23] 26/6/2024 08:34

Yep maybe if they posted a stonking loss it would have risen

[dr biotech] 26/6/2024 08:33

The significant growth in Medical and Complex Industrial Technology included some one-off catch-up due to better component availability, which is not expected to repeat in FY2025.

This is the only negative I can find. Perhaps it’s the increased cap ex? Seems very harsh to me. Perhaps the briefing or investor meet will give more clues

[pireric] 26/6/2024 08:27

Probably the jump in capex guidance for FY25 led to downward revisions to FCF forecasts. Perhaps the market takes that as necessary capex on the back of acquisitions rather than something truly discretionary. But more clarity on that needed

Eric

[sundance13] 26/6/2024 08:19

It was a small beat of earnings forecasts.

[greyingsurfer] 26/6/2024 08:17

Less than expectations? Profit taking? Not that surprising. Doesn't change the overall, picture.

[sasbod] 26/6/2024 08:13

only companies that do not make money have share prices that go up, I am sure the universe is inverted at the moment.

[sundance13] 26/6/2024 08:13

Expecting it to recover somewhat after initial over reaction traders sell off. Results decent with excellent growth in data centres and signs EV market may be improving. May top up if it goes much lower.

[johndoe23] 26/6/2024 08:06

What the hell?

[johndoe23] 26/6/2024 08:04

What's wrong with eps increase of 11.6%??

[ymaheru] 26/6/2024 07:54

I’m quite a Volex fan, but results don’t seem that amazing.

Revenues up 26%, which you’d expect with current copper price being passed on.

Statutory earnings down 6% and underlying eps only up 11.6%.

Lets hope market is happy with this.